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Community Impacts of Marcellus Shale Development: Preliminary Research Findings

Posted: June 27, 2010

A team of faculty and students at Penn State and Cornell have been working together to conduct research on the community and economic impacts of Marcellus Shale development. This article provides an update on one component of that research program, case studies of 4 counties in Pennsylvania and New York to document perceptions of the impacts in the early stages of development.

Courtesy of J. Craig Williams

By Kathy Brasier and Matt Filteau

Many communities in the Marcellus Shale region are experiencing rapid population growth and changes to daily life as natural gas development accelerates. Communities experiencing growth associated with energy development have been called ‘boomtowns.’ Previous research on these boomtowns, usually in the western United States, has documented both positive and negative impacts to economies, communities, families, and individuals. But, individuals’ experiences with development vary based on a number of factors. These factors include whether and how individuals are connected to the energy industry, the stage of development, and the area’s prior experience with natural resource extraction industries (such as mining, oil and gas drilling, forestry, etc.).

This research sought to document perceptions of Marcellus Shale development in the early stages of rapid growth. We conducted 73 interviews during fall of 2009 and winter 2010 in four counties – Bradford, PA, Lycoming, PA, Washington, PA, and Steuben, NY. These counties differed in their levels of activity, geographic area within the Marcellus, population size and density, and experience with extractive industries. At the time of our research, Bradford and Washington Counties were experiencing very high levels of activity. Although not as active in terms of wells, Lycoming County had become a business center for the industry serving the central and eastern regions of the play. Steuben County, as other counties in New York, was seeing no active Marcellus drilling, and provides an interesting case for comparison.

Overall, the study finds that rapid development in areas with low population density led to a broader awareness of natural gas impacts, both positive and negative. For instance, Washington County, one of the counties with larger population size and higher population density, was undergoing extensive natural gas development, yet many participants were unaware of specific drilling locations or activities. Respondents in Bradford County—with similarly high levels of activity but low population density—were very aware of drilling activity, locations of development, and its current and potential impacts on the community and landscape.

People we interviewed described several different types of local economic impacts, including wealth creation from leasing activity and business growth. Participants in Pennsylvania also spoke of tax impacts, including the hope that local taxes paid by businesses associated with the industry would off-set taxes paid by local residents. Many respondents discussed the potential for a state severance tax, and were generally supportive if the revenues were returned to the areas experiencing growth and increased demand for services. Some respondents were concerned that taxing this industry too early or too much would drive it away.

The social impact concerning most participants was the potential for rapid population growth. This growth was seen as threatening to the rural way of life and environmental quality many value about the places they live. In some instances, mainly in Bradford County, the increased traffic at the time of our inquiry had already altered life for many participants. The potential for increased inequality among residents – described as the ‘haves and have-nots’ – was also a concern. Respondents felt that while some would benefit through leases and business growth others would bear all the negatives (such as inflation, traffic, noise, and decreased environmental quality).

Many people we interviewed were concerned about the impacts of development on agriculture. The question many rhetorically raised was: ‘are millionaires going to milk dairy cows?’ Some respondents felt farmers would retire, raising questions about whether the farmland would be developed or split into hunting camps. Others thought the leasing and royalty income would provide the means for farmers to invest in their farms to increase profitability and maintain the farm into the future.

Participants in our project reported severe strain on roads and other physical infrastructure, even during the early stages of development. Participants in Bradford and Lycoming County reported roads no longer accessible by car due to damage caused by heavy trucks and machinery. Also, Bradford and Lycoming County participants reported housing shortages or lack of affordable housing, making it especially difficult for low-income residents to find affordable options.

Although respondents in all counties expressed some environmental concern, participants in Washington and Steuben counties, counties with histories of energy development, reported heightened awareness of and concern for the negative environmental impacts of development. These respondents were especially concerned about preventing ‘legacy’ effects, or environmental problems (such as acid mine drainage) that continue long after active drilling is completed and companies responsible have dissolved or cannot be found. These respondents encouraged regulations that would prevent such future problems.

These results indicate mixed levels of awareness and concern about multiple issues, ranging from environmental to economic to social impacts, influenced by the area’s previous experience with extraction as well as population size and density. We will continue to track these impacts over the life of the play, especially as development increases and spreads across the Marcellus Shale region. We will report additional results from this research as we analyze the data.

A special thank-you to the people we interviewed for sharing their time and insights.

Findings summarized here are based on a paper currently under peer review, written by faculty and students at Penn State and Cornell (Kathy Brasier, Matt Filteau, Diane McLaughlin, Jeffrey Jacquet, Rich Stedman, Tim Kelsey, and Stephan Goetz). For additional information about this research program, please contact Kathy Brasier at kbrasier@psu.edu or 814-865-7321.